A rush by family businesses to sell up before before the April 5 rise in capital gains tax has lead to an increase in work for firms across the board.
The 10% levy on most of capital gains increases to 18% under a change to HM Treasury’s rules.
‘(Business) is about 50% up on this time last year, which was also busy,’ Stephen Quest, tax partner at Grant Thornton, told The Independent. ‘We've seen a real frothing up. Sales are being triggered and brought forward, typically of family-controlled businesses and across a wide range of values, anything from £10m up to £150m. Prices have come down a bit. They're often selling to private equity.’
There is also a feeling businesses which have been built up over decades, or generations, are forced to sell out undervalued. Having held out for a definite decision from the Treasury, these business owners are faced with rushing the sales through.
Kevin Nicholson, head of entrepreneurs and private companies at PricewaterhouseCoopers, said: ‘They resent doing things in a rush. Some are angry that they've built up companies that were intended to be a pension pot on the basis of a 10% tax rate. Suddenly it's 18%. They're wondering what the next change will be, and the next. There's anger and frustration at that.’
Further reading:
Brown urged to ditch homeowners CGT cut
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